Acquisition of AEES Investor presentation 9 August 2011 Harri Suutari President & CEO
Acquisition of AEES PKC becomes a leading wiring harness supplier • PKC Group (“PKC”) has today signed an agreement for the purchase of shares in AEES companies (“AEES”) • AEES is one of the leading North American wiring harness manufacturers for heavy and medium duty trucks and it also has a significant position in light and recreational vehicle wiring harnesses • Combining AEES and PKC will create a first-class global wiring harness manufacturer for trucks, serving the six leading Western heavy and medium duty truck groups in the market • Through the AEES acquisition PKC will also enter the high volume automotive industry in North America and Brazil • In addition, AEES offers PKC an opportunity to expand its product and service offering e.g. via manufacturing of components and wires • The acquisition strengthens and expands PKC’s wiring harness business to a level that meets the future necessities of its global clientele • AEES will be consolidated to PKC as of closing and reported under PKC’s wiring harness business segment 2
Acquisition of AEES Purchase price and financing • Total purchase price, free of net debt : – Cash consideration of €109 million – Share consideration of 1.25 million newly issued PKC shares • Financing mainly through long-term credit facility agreement – New long-term credit facility arrangement negotiated and fully committed – Directed new share issue of 1.25 million shares to the vendors – Share consideration based upon the authorisation received from AGM in March 2011 3
Acquisition of AEES Transaction rationale & strategic fit Key items supporting the acquisition of AEES from PKC’s point of view • PKC, one of the leading wiring harness suppliers for heavy trucks in Europe Create leading and South America, will be become a significant global player wiring system supplier for heavy • Enhanced geographic footprint and global service offering support the truck industry combined entity's ability to strengthen its market position and customer base • Highly complementary customer portfolio in heavy trucks - access to new North Access to new American accounts creates a unique customer base in the world customer base and product segments • Expansion into entirely new customer and product segments • Accelerated sales growth through cross-selling opportunities and global Economies of scale footprint and synergy • Strong purchasing power due to combined sourcing and volumes potential • Streamlining of organisation and production network Combined PKC and AEES have a long term business opportunity and platform for future growth 4
Acquisition of AEES AEES at a glance Overview Net sales by product area Total net sales 2010: EUR 454 million • One of the leading North American wire 10% harness provider for heavy and medium duty • Wiring harness trucks 30% operations generate around two-thirds of • Significant North American presence also in 24% AEES’ net sales light and recreational vehicle harnesses • Components and • In addition, AEES produces components and wire operations stand wire solutions – offered mainly to tier-one for around 35 per cent of total net sales suppliers, but utilized also internally 36% WH (trucks & recreat.) WH (light vehicle) • Operations in four different countries (USA, Components Wire Mexico, Brazil and Ireland) with almost all Net sales by geography production facilities located in low cost countries Total net sales 2010: EUR 454 million • Major customers include e.g. Continental, Daimler Trucks North America, Ford, General • NA is by far the Motors, Harley Davidson, Lear, Navistar and largest region in PACCAR terms of net sales 7% (by customer end 91% 2% • Acquired by Platinum Equity (private equity location) firm) from Alcoa in May 2009 • Global expansion together with existing • Net sales 2010 of EUR 454 million and around customers a growth 13,800 employees as per 30 June 2011 opportunity North America Brazil Ireland Note: USD/EUR exchange rate average for a given period. 5
Acquisition of AEES Key financials of AEES Expected growth in profitability Key financials • AEES has the past years successfully AEES GROUP, €m 1-6/2011 1-12/2010 implemented a comprehensive Profit and loss rationalisation programme to enhance Net sales 265.7 454.0 the company’s overall efficiency and EBITDA (excl. rationalisation costs) 13.4 14.7 competitiveness % of net sales 5.0% 3.2% • Costs related to the rationalisation EBITDA (reported) 5.1 (4.8) programme have burdened the 2010 and % of net sales 1.9% (1.1%) H1/2011 profitability Balance sheet • A clear majority of the rationalisation Fixed assets 26.1 25.7 costs for 2011 have already been booked in H1/2011 Net working capital 43.3 37.4 • Above-mentioned actions, in combination with a rebounding market environment, ensure growth in profitability going forward Note: Financials as per US GAAP. USD/EUR exchange rate average for a given period. Balance sheet items converted at rate of the balance sheet date. 6
Acquisition of AEES AEES’ product portfolio Wiring harness Full service capabilities: Design strategies: • Design engineering • Build to print • Program management • Base/ overlay • Launch support • Multiplex • Manufacturing • Black box • Testing Components Wire Connectors Precision Metal Stamping Junction Boxes Dixie Wire • Sealed blade connectors • High speed precision stamped • Product line consists of • PVC insulated wire • Unsealed blade connectors parts for the automotive industry automotive EMI/RFI filter • XLPE insulated wire • Co-injection moulding through grand traverse stamping mechanisms, electrical distribution • Other insulated and non-insulated • Insert moulding and fuse centre assemblies and wire products (including battery • Product lines include complex • Plastic medical components vehicle electrical harness cable and multi-conductor trailer component parts for automotive • Modular components connection system components cables) electrical distribution systems • Harness and connector retainers • Convolute (convoluted tubing) • Telecommunications components 7
Acquisition of AEES AEES and PKC locations A comprehensive footprint allows global service offering Wiring harness � Nogales, Mexico � Green Valley, Arizona � Kempele, Finland (HQ) � Keila & Haapsalu, Estonia � Kostomuksha, Russia � Barchfeld, Germany � Starachowice, Poland � Sosnowiec, Poland � Mukachewo, Ukraine � Curitiba, Brazil � São Bento do Sul, Brazil � Acuna, Mexico � Piedras Negras, Mexico � Torreon, Mexico � Sao Paolo, Brazil � Itajuba, Brazil � Dallas, Texas � Farmington Hills, Michigan (HQ) � Jeffersontown, Kentucky � Kirkland, Washington � Portland, Oregon � San Antonio, Texas Other segments Components Business: Wire Business � Mattawan, Michigan � Nashville, Tennessee � Traverse City, Michigan � Acuna, Mexico � Juarez, Mexico Blue: PKC Electronics � Torreon, Mexico � Raahe, Finland Green: AEES � Dundalk, Ireland � Suzhou, China � Kostomuksha, Russia 8
Acquisition of AEES Combined entity sales split 2010 Net sales by product line Comments PKC AEES Combined entity 36% 23% 6% • Wiring harnesses is the main operating segment with slightly more than 70% of the 30% combined entity’s net sales 21% 49% 73% 13% • Wires, components and electronics combined generate 6% 24% just under 30% 10% 9% WH (trucks & recreat.) WH (light vehicle) Components Wire Electronics (excl. auto) Comments Net sales by geography PKC AEES Combined entity • A more balanced geographic 11% breakdown compared to the 6% stand-alone companies before 4% transaction 16% 54% 7% • North America generates more 91% 69% 2% than half of the combined net sales, rest of the world 9% 32% responsible for some 45% Europe North America South America Other Note: Financials excluding intra group items and adjusted for SEGU acquisition. USD/EUR exchange rate average for 2010. 9
Acquisition of AEES Strong underlying market North American heavy truck production North American medium duty production 400 400 2009-2013E CAGR: 30% 2009-2013E CAGR: 19% 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 Units in thousands Units in thousands • Record 2006 production was driven by pre-emission • Also the medium duty market declined rapidly in buys and followed by a natural market decline 2008-2009 caused by free-fall in housing market • Low production volumes in 2009-2010 due to limited • Healthy market growth ahead as inter-city economical visibility deliveries pick-up with economical activity • Sharp recovery expected in the near future as fleet ages highest in decades Source: J.D. Power and A.C.T Research. 10
Recommend
More recommend
